Socio-Economics History Blog

Socio-Economics & History Commentary

One More Nail in the Dollar Coffin – China and Argentina in Currency Swap!

  • The USD hegemony is coming to an end. It is public knowledge that powerful countries: China, Russia, Brazil…emerging countries are moving to reduce their exposure to USD in the event of a major collapse.
     
  • We now have Argentina joining the party. Financial Times reports :
       
    China, which is pushing to end the dominance of the dollar as a worldwide reserve, has agreed a Rmb70bn ($10.24bn, £7.18bn, €7.76bn) currency swap with Argentina that will allow it to receive renminbi instead of dollars for its exports to the Latin American country.
     
    Xinhua, the official Chinese news agency, said the deal was signed on Sunday by Zhou Xiaochuan, governor of the People’s Bank of China, and Martín Redrado, Argentine central bank president, in Medellín, Colombia, where they are attending a meeting of the Inter-American Development Bank.
     
    An Argentine official confirmed a deal had been discussed and said the fine print was being worked out and negotiations were “very advanced”.
     
    Beijing has signed Rmb650bn ($95bn, €72bn, £67bn) of deals since December with Malaysia, South Korea, Hong Kong, Belarus, Indonesia and, now, Argentina in an attempt to unblock trade financing that has been severely curtailed by the crisis.

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April 1, 2009 - Posted by | Economics | , , , , , , ,

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